International estate planning for Latin American families: Miami, Madrid or both?

A report on a panel session, part of the 31st Annual International Private Client Tax Conference, titled ‘International estate planning for Latin American families: Miami, Madrid or both?’ held on 2 March 2026
 

Session Co-Chairs
Álvaro Checa Rodríguez  Kinship Law Partners, Madrid

Arianne R Plasencia  McDermott Will & Schulte, Miami

Panellists
Victor Manuel Barajas Barrera  Basham Ringe y Correa, Mexico City

Rodrigo Castillo Cottin  Rimon Law, Bogotá

Adriane Pacheco  Humberto Sanches, São Paulo

Reporter
Mar Morey Torrens  Kinship Law Partners, Madrid

Introduction

As Latin American families increasingly internationalise both their wealth and personal lives, estate planning has become significantly more complex. Political and economic uncertainty across the region, often driven by regulatory changes, fiscal reforms and electoral cycles, has contributed to sustained capital outflows. At the same time, families are increasingly relocating family members abroad, particularly to the US and Europe, with Miami and Madrid consolidating their role as key hubs for residence, investment structuring and wealth planning purposes.

This situation results in assets, individuals and legal relationships being distributed across multiple jurisdictions, creating structural challenges that cannot be addressed from a single legal perspective. Estate planning must, therefore, operate within a multilayered framework, in which private international law, domestic succession regimes and tax systems intersect.

Against this background, the panel provided a comparative and practice-oriented analysis of cross-border estate planning from various perspectives, focusing on Colombia, Mexico, Brazil, Spain and the US. Moderated by Álvaro Checa Rodríguez and Arianne R Plasencia, the discussion was structured around two main axes: property relations between spouses and partners, and succession planning, including conflict of laws and tax implications.

Panel discussion

Matrimonial regimes and stable union regimes

The panel began by addressing matrimonial property regimes as a foundational element of estate planning. Across jurisdictions, a key distinction exists between community property systems, under which assets acquired during the marriage are jointly owned, and separation of property systems, where ownership remains individual unless otherwise agreed.

In Colombia, the matrimonial regime follows a community property system but with a distinctive feature: it may be invoked based on nationality, even in situations where spouses reside abroad. This allows Colombian law to apply on a worldwide basis. For example, a Colombian national living in Florida, in the absence of a prenuptial agreement, may invoke Colombian law upon divorce, thereby subjecting assets acquired during the marriage, potentially on a global scale, to community property rules.

In Mexico, both community and separation regimes exist depending on the state, although separation of property is most commonly applied by default. However, marital agreements are not always widely used in practice and courts may grant compensatory rights upon divorce, likely in favour of the economically weaker spouse, effectively producing outcomes that resemble community property.

In Brazil, the applicable regime is determined by the spouses’ domicile at the time of marriage, with partial community property applied as the default regime. While alternative regimes may be chosen, the application of foreign law before Brazilian courts requires the submission of formal proof, often creating evidentiary and practical challenges. This reinforces the importance of structuring agreements, particularly postnuptial agreements, in advance of any cross-border relocation.

In Spain, the default matrimonial regime applied is generally one of community property, although this varies across autonomous regions, with some – such as Catalonia and the Balearic Islands – applying separation regimes. Spanish law allows spouses to modify the applicable regime through marital agreements, offering flexibility that is particularly relevant in international scenarios.

In the US, the applicable regime depends on the state, with Florida generally following a separation of property model. This diversity reinforces the importance of identifying the relevant jurisdiction and coordinating planning accordingly.

The recognition of stable unions and non-marital relationships is also relevant. In Brazil, stable unions are recognised as family entities with legal effects broadly equivalent to marriage, including rights relating to property, alimony and succession. In Colombia, stable unions are also recognised, although their existence is determined by courts based on factual circumstances, which may lead to uncertainty or unexpected outcomes.

In Spain, registered partnerships have gained increasing legal recognition, although their treatment in cross-border contexts is not always consistent. Similarly, Mexican law recognises cohabitation under certain conditions, including for tax purposes, reflecting a broader trend towards the recognition of non-traditional family structures.

The tax implications of different matrimonial and divorce situations

The tax treatment of divorce and separation varies significantly across jurisdictions, particularly in relation to the division of assets and compensatory payments.

In Colombia, transfers of assets as part of the liquidation of the marital regime are generally not treated as taxable events, as they are considered to be a partition of the parties’ pre-existing rights. However, where allocations exceed each spouse’s proportional entitlement, the excess may be characterised as a gratuitous transfer or compensatory payment, potentially triggering taxation.

In Mexico, there is no general exemption for transfers arising from divorce settlements. While alimony is generally exempt from taxation, other forms of compensation may be subject to income tax. In practice, this situation may lead to parties structuring settlements through alimony or transfers made prior to the formalisation of their divorce, allowing asset reallocations in order to benefit from more favourable tax treatment.

In Brazil, the division of marital property is generally tax neutral provided that assets are allocated in accordance with the applicable regime and according to the asset’s historical cost. However, transfers at market value or disproportionate allocations may trigger capital gains or gift tax. Certain municipal authorities may seek real estate transfer taxes, particularly where allocations exceed a 50 per cent threshold.

In Spain, the liquidation of the matrimonial property regime is generally not taxable. However, compensatory payments, particularly those not strictly linked to the division of jointly owned assets, may be taxed as income when in the hands of the recipient. Cross-border cases often raise characterisation issues, particularly where foreign concepts, such as equitable distribution, must be interpreted under Spanish tax rules.

In the US, alimony is neither deductible nor taxable under the current rules, and transfers of property between spouses that are part of a divorce are generally treated as non-taxable events. However, cross-border situations, particularly those involving non-US persons or changes in tax residence, may introduce additional complexity.

Overall, while many jurisdictions aim to preserve tax neutrality during divorce proceedings, such neutrality is often conditional and dependent on proportionality, timing and the relevant legal characterisation.

The applicable law in regard to succession and choice of law

The determination of the applicable law in regard to succession is also a central issue during cross-border estate planning.

Under the European framework, succession is generally governed by the deceased’s habitual residence at the time of death, although individuals may elect the law of their nationality (professio iuris). While this provides flexibility, its effectiveness depends on its recognition by other jurisdictions. This is the approach followed in Spain.

In Colombia, the applicable law is determined primarily by domicile, with a distinction between movable and immovable assets, the latter being subject to lex situs. Colombian law will apply to assets located within the country regardless of any foreign elements, particularly where forced heirship protections are involved. As a result, estate planning often requires a separation between the Colombian and foreign assets involved.

A similar approach is adopted in Brazil, where succession is governed by the law of the deceased’s last domicile and courts retain jurisdiction over local assets. Choice of law is generally not permitted, and foreign law may be disregarded where it conflicts with public policy, particularly in relation to forced heirship or equality between heirs.

In Mexico, succession also follows a domicile-based system, combined with lex situs rules for immovable property. Although there is no formal mechanism for choosing the applicable law, in practice it is advisable to structure separate wills for different jurisdictions, provided they are consistent and coordinated.

In the US, a fragmented system applies, distinguishing between movable property, governed by domicile, and immovable property, governed by lex situs. The absence of a unified framework for choice of law increases the importance of careful estate planning.

Across jurisdictions, forced heirship rules remain a key constraint. While Spain, Colombia and Brazil impose limitations on testamentary freedom, the US and Mexico allow greater flexibility, although such flexibility may be limited in cross-border contexts.

The taxation of inheritance and gifts

The final part of the discussion focused on the taxation of wealth transfers.

There are three main models: systems taxing the recipient (Spain, Brazil), systems taxing transfers under income tax rules at the recipient level (Mexico, Colombia) and the US system that taxes the estate or donor.

In Colombia, inheritance and gifts are taxed at the level of the recipient under income tax rules, typically as capital gains, depending on the applicable residence and asset location.

In Mexico, there is no inheritance or estate tax as such, although taxation may arise at the level of the recipient. In cross-border situations, transfers of Mexican assets may be taxed on a gross basis, potentially resulting in significant tax exposure.

In Brazil, inheritance and gift tax is levied at the state level, with the recipient as the taxpayer. Recent legislative developments have introduced clearer rules for cross-border scenarios, although implementation of these rules is ongoing.

In the US, estate and gift taxes are levied at the level of the transferor, based on worldwide assets for US persons and US situs assets for non-residents. Trust structures are commonly used, although they may create mismatches in international contexts.

In Spain, inheritance and gift tax is levied at the level of the beneficiary, with worldwide taxation for residents and territorial taxation for non-residents. Significant regional reliefs, often up to 99 per cent, apply for transfers between close relatives and family businesses, creating opportunities as well as complexity.

Conclusion and final remarks

The panel session demonstrated that cross-border estate planning for Latin American families requires a genuinely integrated, multijurisdictional approach. Differences in matrimonial regimes, succession rules and tax systems do not operate in isolation but interact in ways that may significantly alter the intended outcome of any estate planning structure.

A central challenge lies in the coexistence of different connecting factors, domicile, habitual residence, nationality and situs of assets, across jurisdictions. While some systems allow flexibility, others impose strict limitations through forced heirship or territorial rules, potentially undermining planning strategies.

The session also highlighted the risks arising from divergent tax models, particularly where systems tax different people or apply different valuation and timing rules. Without proper coordination, these differences may result in inefficiencies or double taxation.

Ultimately, effective estate planning requires anticipating how legal systems will interact in practice. As emphasised throughout the session, this demands close collaboration between advisers across jurisdictions and a careful alignment of the relevant legal, tax and personal considerations. In an increasingly global environment, the objective is not only to design structures that work in one jurisdiction, but to ensure that they operate coherently and effectively across all of them.